The reversible proton dissociation and geminate recombination of the common photoacid, 8-hydroxypyrene-1,3,6-trisulfonate (pyranine), either in dilute aqueous solution or when forming a complex with gamma-cyclodextrin (gamma-CD), has been studied by time-resolved fluorescence spectroscopy and supplemented by molecular modeling and dynamics simulations. We find that the dissociation rate of the proton from the excited molecule was decreased to about approximately 50% of its value in water, while the rate of recombination was doubled. These observations were evaluated by molecular modeling of the reactants at atomic resolution. The combination of the two methodologies indicates that the pyranine in the complex can assume more than one level of interaction with the solvent. The polysugar torus surrounding the pyranine perturbs the hydrogen bond in the dye's immediate vicinity and deforms the electrostatic potential inside the Coulomb cage, causing major deviations from a simple spheric symmetry. These observations can account for the special kinetic features measured for the complex. We suggest that this system can be used as a basic model for evaluating the mechanism of proton transfer in non-homogeneous systems, such as the surface of proteins or biomembranes.